Siemens acquires Mentor Graphics

Siemens and Mentor Graphics have entered into a merger agreement under which Siemens will acquire Mentor for $37.25 per share in cash, which represents an enterprise value of US$4.5 billion. The offer price represents a 21% premium to Mentor’s closing price on 11 November 2016, the last trading day prior to the announcement.

Mentor’s board of directors approved and declared advisable the merger agreement. They also recommend the approval and adoption of the merger agreement by the holders of shares of Mentor common stock.

This acquisition extends Siemens’ Digital Enterprise Software portfolio with Mentor’s well-established electronics IC and systems design, simulation and manufacturing solutions.

“Siemens is acquiring Mentor as part of its Vision 2020 concept,” said Joe Kaeser, president and CEO of Siemens. “It’s a perfect portfolio fit to further expand our digital leadership and set the pace in the industry.”

“With Mentor, we’re acquiring an established technology leader with a talented employee base that will allow us to supplement our world-class industrial software portfolio. It will complement our strong offering in mechanics and software with design, test and simulation of electrical and electronic systems,” said Klaus Helmrich, member of the managing board of Siemens.

Mentor is headquartered in Wilsonville, Oregon, US, and has employees in 32 countries worldwide. In its fiscal year ended 31 January 2016, Mentor had over 5700 employees and generated revenue of approximately $1.2 billion with an adjusted operating margin of 20.2%. Siemens expects these attractive margins to continue in the future and contribute significantly to the Product Lifecycle Management (PLM) software business of Siemens’ Digital Factory (DF) Division, which Mentor will join.

Mentor serves a large, diverse customer base of marquee systems companies and IC/semiconductor companies with over 14,000 global accounts across communications, computer, consumer electronics, semiconductor, networking, aerospace, multimedia and transportation industries. Mentor is viewed as a global leader in strategic industry segments including IC design, test and manufacturing; electronic systems design and analysis; and emerging markets including automotive electronics.

“Combining Mentor's technology leadership and deep customer relationships with Siemens’ global scale and resources will better enable us to serve the growing needs of our customers and unlock additional significant opportunities for our employees,” said Walden C Rhines, chairman and CEO of Mentor. “Siemens is an ideal partner with financial depth and stability, and their resources and additional investment will allow us to innovate even faster and accelerate our vision of creating top-to-bottom automated design solutions for electronic systems. We are excited to join the Siemens family, as it is clear they share the same values and focus on customer success, and are pleased that this transaction provides immediate and certain value to our stockholders.”

“By adding Mentor’s electronic design automation solutions and talented experts to our team, we’re greatly enhancing our core competencies for product design that creates a very precise digital twin of any smart product and production line,” noted Helmrich.